Rising costs force employers to reconsider health benefits

A raft of reports have suggested that the tough economic climate is increasingly straining the ability and commitment of employers to fund fast-track private healthcare and health support.

A report from insurer Mercer has argued that UK businesses are now facing serious “medical inflation”, with the cost of providing healthcare and health-related benefits to employees rising by 4.9% in 2010, on top of rises of 6% in 2009 and 10% in 2008.

The Government’s controversial NHS reforms, meanwhile, will simply put more pressure on private medical schemes, and could even force company premiums higher, it has warned.

At the same time, a survey of more than 1,000 workers and 504 executives by healthcare provider Simplyhealth has argued that nearly one UK employee in five feels that their workplace has changed in the past year and that their employer now cares less about their health and wellbeing.

Increased workloads, the failure of employers to manage absence effectively and greater stringency around time off for medical appointments were cited as the main reasons, with tensions greatest in the public sector, where more than a quarter of employees feel this way, against 13% in the private sector.

Meanwhile, research by consultancy Towers Watson has argued that rising healthcare costs and a growing concern over the health of their employees will encourage more multinationals to place a higher priority on workforce health initiatives and the overall wellbeing of their workers over the next few years.

The global poll found that more than two-thirds of multinationals headquartered in Europe, the Middle East or Africa ranked employee wellbeing and stress management among their top three health strategy priorities.

In addition, a US survey by consultancy Aon Hewitt has suggested that employers are relying more on employees to stem the tide of rising healthcare costs, although an inability to motivate and change habits is of growing concern.